The Canadian dollar (CAD) has recently faced significant pressure, primarily due to falling oil prices which have a direct impact on this commodity-linked currency. Analysts report that recent declines in oil prices, now trading at around $65.07, represent a 1.7% decrease from their three-month average of $66.21. This volatility has further contributed to the CAD trading at near 90-day lows against the Pakistani rupee (PKR), recently positioned around 199.9, which is 1.9% lower than its three-month average of 203.7.
Economic forecasts indicate that the Canadian economy may have contracted in September, which could exacerbate the CAD's decline. Furthermore, the Bank of Canada’s recent interest rate cut to 2.5% is expected to discourage foreign investment, thereby weakening the CAD even further. This sentiment is compounded by speculation surrounding the U.S. Federal Reserve's potential rate cuts, which have provided some stabilization for the CAD against the U.S. dollar but may not be sufficient to stem the overall depreciation trend.
On the other hand, the Pakistani Rupee (PKR) continues to navigate challenging waters marked by geopolitical tensions and trade disruptions, which have led to a 12% depreciation against the U.S. dollar since January 2025. Although the State Bank of Pakistan has actively intervened to support the PKR and secured an IMF loan which mandates important economic reforms, short-term pressures persist that complicate prospects for recovery. Analysts suggest that PKR could further decline, potentially reaching 100 PKR per USD by early 2026.
Overall, the outlook for the CAD/Phrase exchange rate suggests continued volatility with weak economic indicators in Canada and persistent challenges in Pakistan's economy influencing exchange rate dynamics. Stakeholders should closely monitor oil price movements and central bank policies in both countries as critical factors impacting future exchange rates. With the CAD at low levels and the PKR facing potential further depreciation, businesses and individuals engaging in international transactions may want to consider these factors in their currency conversion strategies.
